The End of Medieval Economics: How American Theologians and Merchants Abandoned Aristotle and Invented Capitalism


by Jerry Bowyer

Why were the Middle Ages so poor? There are many reasons: a mini ice age suppressing crop yields, the rise of the Islamic empire cutting trade and shipping ties in half, ideologies which degraded commerce in contrast with ‘higher’ pursuits like church work are among them. But for economists, what stands out most starkly is the flawed theory which held that there is a ‘just price’ for goods, currencies, and services, and that just prices should be enforced by ecclesiastical and civil law. This idea does not come from the Bible, but from “The Philosopher” (Aristotle), who was viewed as the ultimate authority on world matters.

While Aristotle made genuine advances in almost every field in comparison with what had come before him, his great genius became a kind of new authority, a dead hand of tradition which held Europe back from progress in many disciplines. It was Aristotle, not the Bible, who created the scientific theory that the earth is the center of the solar system (which was then codified into Ptolemaic astronomy) and it was Aristotle, not the Bible, who created the theory that money is sterile and therefore that all interest should be forbidden.

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